Canada markets open in 43 minutes
  • S&P/TSX

    -58.61 (-0.36%)
  • S&P 500

    -10.29 (-0.30%)
  • DOW

    -222.19 (-0.80%)

    -0.0060 (-0.79%)

    -1.81 (-4.57%)

    -534.36 (-2.95%)
  • CMC Crypto 200

    +0.15 (+0.06%)

    -31.20 (-1.63%)
  • RUSSELL 2000

    -14.73 (-0.92%)
  • 10-Yr Bond

    -0.0240 (-3.08%)
  • NASDAQ futures

    -168.50 (-1.45%)

    +4.46 (+13.74%)
  • FTSE

    -107.85 (-1.88%)
  • NIKKEI 225

    -67.29 (-0.29%)

    -0.0015 (-0.23%)

Reitmans to lay off 1,400 as it closes two of its brands

Alicja Siekierska
·2 mins read
Oakville, Ontario, Canada - July 25, 2019: A Reitmans store in Oakville, Ontario, Canada. Reitmans Ltd. is a Canadian retailing company, specializing in women's clothing.
Oakville, Ontario, Canada - July 25, 2019: A Reitmans store in Oakville, Ontario, Canada. Reitmans Ltd. is a Canadian retailing company, specializing in women's clothing.

Reitmans Ltd. will shutter two of its fashion brands and lay off 1,400 employees as the clothing retailer restructures its business under creditor protection.

The Montreal-based company, which filed for protection from its creditors on May 19, announced on Monday that it will permanently close 77 Addition Elle and 54 Thyme Maternity stores over the course of the summer. The retailer also said it will lay off 1,100 employees at its retail stores and 300 workers at its head office as it continues the restructuring process.

The decision leaves Reitmans with its namesake brand, Penningtons and RW&Co.

Reitmans chief executive Stephen Reitman said in a statement on Monday that the decision to close Addition Elle and Thyme Maternity “was not made lightly” but necessary for the business “to move forward as a profitable organization.”

“All of the efforts we put forth to turn these brands around were derailed by the COVID-19 pandemic and, unfortunately, we can no longer afford the required resources to bring them back to profitability,” he said.

“As we forge ahead with these three flagship Canadian brands, our intention is to write the next chapter of our Company's history for a stronger and brighter future.”

Reitmans said it will liquidate inventory and shut down physical and e-commerce Thyme Maternity stores by July 18. Addition Elle stores will shutter by Aug. 15.

After the closures, the retailer will be left with 445 stores, including 259 Reitmans, 106 Penningtons and 80 RW&Co locations, and approximately 5,400 employees. The company currently operates 576 stores and employs approximately 6,800 people.

Reitmans sought protection from its creditors under the Companies’ Creditors Arrangement Act on May 19 after the COVID-19 pandemic exacerbated ongoing issues at the struggling retailer. The company’s net loss for the year ending Feb. 1, 2020 was $51.7 million, or a loss of $1.06 per diluted share, compared to a loss of $8.9 million last year, or a loss of 14 cents per share.

Addition Elle has been an underperforming brand for Reitmans. The company said in its annual report released in May that “strategic brand changes” implemented at the beginning of its 2020 fiscal year failed to resonate with the company’s plus-sized banners, leading to disappointing financial performances at Addition Elle and Penningtons.

The retailer said that it will offer “an enhanced product offering” at its plus-sized Pennington’s brand as it looks to retain Addition Elle customers.

“We are committed to the plus-size market in Canada with both a size-inclusive offering at Reitmans, and dedicated expertise and service at Penningtons,” the company said.

Download the Yahoo Finance app, available for Apple and Android and sign up for the Yahoo Finance Canada Weekly Brief.